Judges: K. N. AYERS
Agency: Department of Financial Services
Latest Update: Apr. 18, 1991
Summary: Petitioner's claim for a refund should be denied. It is not a newspaper within the accepted definition and not entitled to exemption.
81-1236.PDFSTATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
NORTH AMERICAN PUBLICATIONS, ) INC., )
)
Petitioner, )
)
vs. ) CASE NO. 81-1236
) STATE OF FLORIDA, OFFICE OF THE ) COMPTROLLER, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, K. N. Ayers, held a consolidated hearing in the above-styled case with Case No. 80-2072R on 13 July 1982 at Tampa, Florida.
APPEARANCES
For Petitioner: C. Timothy Corcoran, III, Esquire and
Robert W. Courtney, Esquire Post Office Box 3239
Tampa, Florida 33601
For Respondent: Thomas L. Barnhart, Esquire
Department of Legal Affairs The Capitol, LL04 Tallahassee, Florida 32301
By Petition filed 28 April 1981, North American Publications, Inc., Petitioner, seeks a refund of sales taxes, penalties, and interest paid under protest in the amount of $104,455.50 for the period March 1, 1979, through December 31, 1980. By notice dated April 3, 1981, the Comptroller, Respondent, notified Petitioner of its intent to deny the application for refund submitted by Petitioner and the Petition here involved was filed to challenge this ruling. Petitioner's claim for refund of sales taxes is based upon Petitioner's claim that it is exempt from these taxes by reason of its status as a newspaper.
In companion case No. 80-2072R Petitioner contends that Rules 12A- 1.08(3)(d) and (4), Florida Administrative Code, are an invalid exercise of delegated legislative authority and that, pursuant to the provisions of Section 212.08(6), Florida Statutes, Petitioner's paper, The Tampa/Metro Neighbor, (Neighbor), is a newspaper and exempt from sales tax.
Contemporaneously with the filing of this Petition, Petitioner filed suit in the Circuit Court in and for Leon County against the Department of Revenue and the Comptroller to litigate the tax and constitutional issues involved.
These proceedings were stayed pending resolution of that action. By Order entered 30 October 1981 the Circuit Court in and for Leon County, in Case No.
51-1070, granted Defendant's Motion to Dismiss on grounds Plaintiff had not exhausted its administrative remedies. Following this Order, these cases were rescheduled to be heard 13 and 14 July 1982.
Pursuant to order, the parties entered into a Prehearing Stipulation dated July 6 and 7, 1982, in which their relative positions were set out, numerous exhibits were identified and authenticated, certain facts were agreed upon, and witnesses were identified. At the hearing Petitioner called five witnesses, Respondent called one witness, and some 75 exhibits were admitted into evidence. Many of these exhibits were of the same type and carried the same exhibit number and were distinguished by a letter-designation (e.g., 1A, 1B, 1C, etc.).
Without counting the letter designated exhibits as separate, Petitioner submitted 29 exhibits, Respondent two exhibits, and four joint exhibits were admitted into evidence. Objections on grounds of relevancy were overruled and all exhibits were admitted into evidence. However, those subsequently found not relevant to the issues here presented have been disregarded. The material facts are largely undisputed. Proposed findings submitted by the parties and not included below were not supported by the evidence or were deemed immaterial to the results reached.
FINDINGS OF FACT
In Exhibit 3 Petitioner disputed the overpayment of sales tax, penalties and interest in the amount of $62,035.63. At the hearing it was stipulated that the disputed sum is $62,000.00.
Petitioner is owner and publisher of a weekly paper, The Tampa/Metro Neighbor (Neighbor), published in Tampa and distributed in the Tampa metropolitan area of Hillsborough County.
The Neighbor is distributed to readers free of charge. Petitioner started rack sales September 27, 1980, and has sold approximately 125 per week since that time. Its total circulation is approximately 164,009.
The Neighbor has not been entered or qualified to be admitted and entered as second class mail matter at a post office in the county where it is published.
The Neighbor is delivered by approximately one thousand carriers to residences and apartments in Hillsborough County each Thursday. The papers are placed in plastic bags to protect them from the weather.
Petitioner claims sales tax exemption for the purchase of newsprint, ink, and plastic bags used to print and distribute the Neighbor. Newspapers such as The Tampa Tribune are exempt from sales tax on these items.
Only newspapers and other periodical publications are eligible for mailing at second class rates of postage. Publications primarily designed for free circulation and/or circulation at nominal rates may not qualify for the general publications category (Exhibit 24). General publications primarily designed for advertising purposes may not qualify for second class privileges. Those not qualifying include those publications which contain more than 75 Percent advertising in more than half of the issues published during any 12- month period (Exhibit 24). Second class mail privilege is a very valuable asset for newspapers and other qualifying publications.
The editorial content of the Neighbor, which they define as everything except advertisement, is comprised of local news, sporting news, local investigative reporting, an opinion section, and an entertainment section. The advertising is split into classified ads and other. The Neighbor contains no national or international news, no wire service reports, no comics, no stock market reports, no sports statistics, no weather reports, no national syndicated columnists, no state capital news, no obituaries, no book review section, and no special section such as home design, gardening, etc.
Neighbor considers its primary competitor to be The Tampa Tribune. However, this competition is limited to advertising as the Neighbor has none of the traditional newspaper features above noted which are normally carried in daily newspapers.
Petitioner presented two expert witnesses who opined that the Neighbor met the requirements to be classified as a newspaper because it was published in newspaper format; that it had an editorial section which provided some news as contrasted to that provided in a shopping guide; that the 75 percent - 25 percent advertising-editorial content did not make the Neighbor primarily an advertising paper; that the requirements of the U.S. Post Office for a periodical to obtain second class mail privileges is not relevant to a determination that the Neighbor is not newspaper; that the requirements of the Department of Revenue Rules 12A-1.08(3)(d) and 12A-1.08(4) Florida Administrative Code, are not relevant in determining whether the Neighbor is a newspaper; and that in a journalistic concept the Neighbor is a newspaper.
The Neighbor was purchased in 1979 by North American Publications, Inc., a wholly owned subsidiary of Morris Communications Corporation. Morris Communications Corporation owns several newspapers scattered from Florida to Alaska, both daily and weekly publications. Most of these publications are sold to paid subscribers. Petitioner's testimony that sales tax was not collected from Petitioner's predecessor owners was flatly contradicted by the testimony of Respondent's witness. Since the latter witness is in a much better position to know the facts respecting sales taxes levied on the former owner of the Neighbor, this testimony is the more credible. In any event, Petitioner did not claim estoppel.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings.
Section 212.08, Florida Statutes, provides certain exemptions from sales and use taxes, and subsection (6) thereof provides in part: "Likewise exempt are newspapers. . . " Newspapers are not otherwise defined in Chapter 212.
Rule 12A-1.08, Florida Administrative Code, provides in part:
In order to constitute a newspaper, the publication must contain at least the following elements:
It must be published at stated short intervals (usually daily or weekly)
It must not, when successive issues are put together, constitute a book.
It must be intended for circulation
among the general public.
It must have been entered or qualified to be admitted and entered as second class mail matter at a post office in the county where published.
It must contain matters of general interest and reports of current events. If the publication is devoted primarily to
matters of specialized interests such as legal, mercantile, political, religious or sporting matters, and it contains in addition thereto general news of the day, information of current events and news of importance and of current interest to the general public, it is entitled to be classified as a newspaper.
To qualify for exemption as a newspaper,
a publication must be sold and not given to the reader free of charge. So-called newspapers which are given away for advertising and public relations purposes are taxable.
In Case No. 80-2072R, decided this date, the validity of the above- quoted Rule 12A-1.08 was sustained as a valid exercise of delegated legislative authority.
Since the Neighbor has not been entered or qualified to be admitted and entered as second class mail matter at a post office in the county where published, and is given away free, it does not qualify for the newspaper exemption from sales tax.
The fundamental rule of construction is that tax laws are to be construed strongly in favor of the taxpayer and against the government and all ambiguities are to be resolved in favor of the taxpayer, Maas Bros., Inc. v. Dickinson, 195 So.2d 193 (Fla. 1973); but, exemptions to taxing statutes are special favors granted by the Legislature and are to be strictly construed against the taxpayer. Wanda Marine Corp. v. Revenue, 305 So.2d 65 (Fla. 1 DCA 1974).
From the foregoing it is concluded that the Neighbor does not qualify as a newspaper as defined in Rule 12A-1.08, Florida Administrative Code, and does not qualify for the exemption from sales tax granted by Section 212.08(6) , Florida Statutes. It is therefore
RECOMMENDED that the Petitioner's claim for refund of sales tax, penalties and interest for the period March 1, 1979, through December 31, 1980, be denied.
ENTERED this 16th day of September, 1982, at Tallahassee, Florida.
K. N. AYERS, Hearing Officer Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32301
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 16th day of September, 1982.
COPIES FURNISHED:
C. Timothy Corcoran, III, Esquire and
Robert W. Courtney, Esquire Post Office Box 3239
Tampa, Florida 33601
Thomas L. Barnhart, Esquire Department of Legal Affairs The Capitol, LL04 Tallahassee, Florida 32301
Gerald A. Lewis, Comptroller Office of the Comptroller The Capitol
Tallahassee, Florida 32301
Docket for Case No: 81-001236
Orders for Case No: 81-001236
| Issue Date |
Document |
Summary |
|
Dec. 15, 1982 |
Agency Final Order
|
|
|
Sep. 16, 1982 |
Recommended Order
|
Petitioner's claim for a refund should be denied. It is not a newspaper within the accepted definition and not entitled to exemption.
|
